2:27pm: The benchmark S&P/ASX 200 Index lost 61.6 points, or 1.2 per cent, to 5294, while the broader All Ordinaries Index fell 1.1 per cent to 5312.7 as local shares followed Wall Street lower. Markets around the region also fell, with Japan’s Nikkei and Hong Kong’s Hang Seng both down about 1.4 per cent in late trade.

As was widely expected, the US Federal Open Market Committee elected to reduce the value of its monthly asset purchases by $US10 billion to $US55 billion, however the policy-makers surprised the market by raising their interest rate forecasts more aggressively than expected for 2015 and 2016.

Dr Yellen said there would be a “considerable time” between the end of quantitative easing and the first interest rate hike. When questioned she clarified that could mean “six months or that type of thing”.

She also said that in addition to monitoring unemployment the Fed would consider a range of indicators of the economy’s health.

“Dr Yellen’s comments are important because they represent a shift from a quantitative to qualitative approach to interest rate policy,” UBS Asia Pacific head of fixed income Anne Anderson said.

“The change has thrown markets a little and there will likely be more volatility but a new person with a new style was always going to do that.”

While the world’s largest economy is withdrawing unprecedented stimulus, the world’s second largest economy is making bold moves to reform its currency and credit markets, adding to volatility in global markets.

Over the past fortnight China has allowed a corporate bond default for the first time since the market was regulated in 1997 and reports of corporate collapses have been increasing. On Monday the government expanded the daily range of its currency peg by 1 per cent.

1:37pm: The threat of the NSW government removing the operating licence from McAleese Ltd's Cootes Transport unithas been stayed after a detailed "corrective action plan" was given to the Government.

In a series of commitments to the government, Cootes is to decommission 50 older units, and buy or bring in new prime movers and tankers for its NSW fleet, review and implement an improved maintenance capability and function, increasing the focus on brake, steering and suspension components.

Additionally, in-house maintenance will be reviewed by an independent third party approved by the government while externally serviced and repaired vehicles will undergo a final check by Cootes’ workshops including checks on brakes, suspension and steering components, and oil leaks.

12:41pm: Earlier today we mentioned a rather controversial note from Commsec chief economist Craig James around housing affordability.

Particularly eyebrow-raising were some of his assumptions about median home prices($450,000) and average disposable household income (almost $112,000) in Australia.

We had no idea we were that wealthy, or that average house prices were so low!

But after a bit of research we are prepared to cast some serious doubt on both those numbers.

James quoted RP Data for the property price figures and ABS for the income numbers.

To reach that average income figure, James totted up the ABS estimates of income per household from the national accounts – a bit over $1 trillion – and then divided by the estimated number of households – 9000.

Using those figures he reached the conclusion that the median Australian home costs around four times disposable income.

We’re not so sure - we calculate it as more likely to be closer to twice that.

First: the income numbers.

We made a call to the ABS and were directed, by a very helpful and informative statistician, to the Household Income and Income Distribution release for 2011-12 (the latest) as the best place to find average measures of household disposable(after tax) income.

The numbers are based on survey results, and include all forms of income – including wages, bonuses, benefits, interest income, and so forth.

The ABS then models the amount of tax paid by each household to come up with a disposable income figure.

According to this measure, then, the average disposable income across Australia was $1550/week, or $80,600 a year.

That sounds more like it.

A better measure is probably the median figure, as it removes the skew in the sample towards higher earners and so is more representative of the population as a whole.

So the median disposable household income is $1284/week, or $66,768 a year.

That means the disposable income figure quoted by James is 39 per cent above the ABS preferred average measure, and 68 per cent higher than the median measure.

Next, we looked at the RP Data median home price figure.

We first hit a snag when we found no mention on their website of an average across all of Australia – the best was a “eight capital city aggregate” which quotes a median dwelling price of $533,750 as at the end of January – 19 per cent higher than James’s quoted value (which was for December).

RP Data did report the “rest of state” median house value was $344,450, but as we know the vast majority of Australians live in capital cities.

11:54am:US natural gas prices could rise by more than half and LNG exports would still match up economically against supplies from traditional shippers to Japan such as Australia, according to the International Energy Agency’s head of global gas markets research.

Speaking in Sydney today, Anne-Sophie Corbeau, senior gas analyst at the Paris-based IEA, said that LNG exports from the US would be “competitive” in north Asia with US benchmark gas prices of up to $US7 per million British thermal units.

The forecast sounds a warning for producers in higher-cost supply countries such as Australia, which will face increasing competition from the many LNG export terminal projects being developed on the US Gulf Coast.

Other analysts have calculated that an increase in US prices above $US5.50 or $US6 would effectively close the window for US LNG in Asia.

But the IEA’s forecast leaves still plenty of scope for US domestic prices to rise before US LNG exports would be undercut by Asia’s existing suppliers.

11:33am: OK, as requested by a reader, here's a chart that tracks the performance of the ASX 200 over recent financial years.

(Actually, the request was for All Ords - realised that too late, but shouldn't matter considering how top-heavy our market is.)

We've excluded the June 2012 financial year when the market flunked as it didn't look comparable - note we're NOT making a judgement on whether the market will flunk again this year or not, just that it took a totally different trajectory - it started down and ended lower.

So far, the year we look most like is 2010-11 when the market ended the fiscal year with a 8.8 per cent gain - the same as in 2009-10.

11:15am: In case you were wondering why Brambles fell as much as 3 per cent today (and we know you were), this could have something to do with it:

Supply-chain logistics giant Brambles has been in discussions with Singapore-listed Goodpack about a potential takeover, but the company said talks did not progress and it has broken off from “active discussions”.

On Wednesday, Goodpack - one of Brambles’ only other listed peers - said it “has been approached by several parties in connection with a possible transaction, which may or may not lead to an offer for the shares of the company”.

In response to a enquiries from analysts, Brambles responded this morning admitting it has “in the recent past” engaged in preliminary discussions with Goodpack.

The Singapore-based container company has a market value of about $US1 billion, but its shares have been running hot in recent trading, which is possibly what prompted Goodpack to make its statement to the market.

UBS analyst Simon Mitchell said that based on consensus earnings forecasts for 2014, Goodpack is valued on a price to earnings multiple of 18 times and enterprise value to earnings before interest and tax multiple of 14.5 times.

“Brambles could still likely make an acquisition accretive using low cost Asian and US dollar debt together with revenue synergies, however, a transaction around the current price would likely be viewed as rich by the market,” Mr Mitchell said in a note to clients.

11:14am: There's nothing quite like a deeply discounted placement to put your share price on the skids, as gold miner Kingsgate has been rudely reminded.

In quick order, your share price will collapse to the price of the discounted offer - if not sink below it - which then complicates efforts to raise funds from shareholders.

And this is just what has happened.

Kingsgate placed shares with institutional investors at $1 a share and is now passing the hat around among retail shareholders, also seeking money at $1.

But with its shares sinking earlier today to a low 92 cents before rebounding, only to again fall back in afternoon dealings - it is now trading at $1.0025 - the chances of getting small investors to kick in more money seems hard to imagine at this point.

10:24am: In the gathering war between diggers and farmers – particularly with the growth of coal seam gas – score one for landowners:

Miners will no longer be allowed to start projects on Queensland farmland if they can't strike a deal with a landholder within 40 days under proposed laws.

The laws, due to be passed by parliament on Thursday, allow individual landholders to independently deal with miners seeking to start projects on their properties.

But Deputy Premier Jeff Seeney says, if a deal can't be reached within 40 days, miners will no longer be allowed to start a project while their application is before the Planning and Environment Court.

"It provides an incentive for the resources industry to negotiate with landholders, and it puts landholders in a much more powerful position," Mr Seeney told the house.

"It ensures that some of the horrendous practices that we saw in the early days of the last decade ... those practices that revolved around the land court 40-day rule can no longer be used to leverage landholders."

The deputy premier said the new laws also set out priority agricultural areas, living areas, strategic cropping areas and strategic environmental areas, bringing regional planning rules in line with urban areas.

"We have mirrored this planning process on the one that is well and truly tried and tested," Mr Seeney said.

"It does not ban development but it controls development, and that is the approach that should have been taken across regional Queensland for the last decade."

10:13am: As the repercussions of this morning’s comments from US Fed chair Janet Yellen continue, we are beginning to see how much of an impact her statements regarding US rates (a first rise “something like” around April?) have had.

For one, the local market has sold off sharply, with miners the worst hit.

Our dollar fell a cent, but then steadied.

And as we mentioned (at 12:19 below), shorter-term US bond yields spiked.

“Today’s move was the largest sell-off in the past year for the front-end,” writes Nomura’s US rates strategy team. “In fact, such a move in 3s or the 2y1y has not been seen since late 2010.”

“Our portfolio was almost completely reset after today’s Fed event, with massive volatility taking some of our trades through targets while others were stopped out.”

The chart below is from the Federal Reserve, and it shows where each of the members of the monetary setting committee (called “participants” here) believe rates should be in the coming years.

You can see that five of the 16 participants – you could call it the median view - see 75 basis points of rate hikes next year, taking the rate to 1 per cent.

The consensus looks like Fed board members see it ending 2016 at twice that – but still a long way from the longer run rate of around 4 per cent.

“Despite the extreme moves in reaction to today’s FOMC meeting, the market continues to sit slightly on the dovish side in terms of pricing in rate hikes compared to the Fed’s forecast,” add the Nomura analysts. (Also see post at 9:24.)

Each dot represents one of the 16 US Fed board members and where they believe rates should end the year and be longer term.

10:01am: The Chinese yuan has extended its fall, plunging to its lowest in more than a year, as a slightly more hawkish stance by the Fed overnight strengthened the greenback, and after the People’s Bank of China on Monday doubled the trading range of the yuan to 2 per cent.

The US dollar has jumped to 6.2180, taking this week’s losses in the Chinese currency to nearly 1 per cent - and well above the 6.20 level that some analysts are citing as a 'red line' or 'danger zone' that could lead to escalating losses on billions of dollars worth of complex derivatives that depend on an appreciating yuan.

The trade is akin to a margin call in that downward foreign exchange movements could require investors who have borrowed cheaply in United States dollars and deployed their capital in high-yielding Chinese investments to incur losses, stump up greater collateral or potentially face default.

Informally, traders have suggested that 6.20 onshore yuan to the US dollar is the level at which these investments are tested or become uneconomic.

Morgan Stanley analysts say the exchange rate has entered into a “danger zone”.

The bank's forex strategist Geoff Kendrick estimates that roughly $US150 billion worth of such positions remained open when the renminbi began its rapid decline in mid-February, and that current mark-to-market losses on such products stand at more than $US2 billion.

If the Chinese currency is weakening and people that have put these structures in place are having to service these US dollar loans, out of either CNY (offshore) or CNH (onshore) which is weakening against the US dollar, it’s costing them more to do that.

The currency losses wipe out the losses that you’re making on the higher interest rate. There’s a lot of interest in that at the moment so there’s the potential for a bigger spike higher, therefore weaker Chinese currency.

US dollar jumps to a one-year high against the yuan, piling pressure on all those who have been betting on a slow rise in the Chinese currency.

9:34am: Time to have a look at the best and worst stocks in the ASX 200 so far today.

The big outlier is Wotif.com as its share price gives back some of the extraordinary gains of yesterday - which were apparently the result of the loosening up of the company's share register (easing path for a prospective takeover?) after a major shareholder finally dumped their stake. Well, that's the story, anyway.

Other than that it's gold miners in the list of losers - they look all shaken up following the US Fed's surprisingly hawkish view on the expected path of interest rates.

9:19am: If there was any doubt that US Fed chair Janet Yellen’s comments overnight were a major surprise to bond investors – look no further than the moves in the five-year US bond rate.

An almighty spike (see chart) from 1.58 per cent to 1.71 per cent showed the “lower for longer” camp was jolted out their slumber with her comments that the Fed could begin hiking rates six months after its QE bond programme ends.

In recent months and years the focus has been on longer term rates – which reacted far more violently in May and June of last year when former Fed chairman Ben Bernanke made the first noises that he would scale back the Fed’s bond purchases.

Overnight however – while 10-year yields did react – the move from 2.66 to 2.75 was more modest – suggesting the longer end of the market had “priced in” more of the hiking of rates

This makes sense. Since QE pushed long term rates down and forward guidance is a short term interest rate story, it’s no surprise that 2 year and 5 year bonds got hit harder.

From now expect the shorter part of the US bond curve to come under greater scrutiny.

8:45am: Few comments this morning around unusually large trading volumes, and as readers have suggested, it looks to be the expiry of futures contracts, as CMC Markets equities dealer Chay Flack writes:

Today investors saw a delayed market open as March equity index derivatives, including the ASX SPI 200 futures and sector futures over the S&P/ASX200, expire. Holders have the choice to roll their futures contracts out prior to expiry or let their exposure hit the market, which is why volumes are higher than normal.

As its one of the few times each year where volume is readily available, prices can be erratic as fund managers position their portfolios and acquire their necessary equity volumes.

Tomorrow, investors can expect similar volatility at the close of market with the quarterly rebalance of the S&P/ASX 200 Index, which sees Bega Cheese enter and Virgin depart, a move likely to put the airline’s price under pressure. Qantas will also be removed from the S&P/ASX 50 Index, to be replaced by James Hardie.

Myer'sprofit result for the half year to the end of January sheds some light on why Myer is pursuing a merger with its department store rival, David Jones. Chief executive Bernie Brookes told analysts on Thursday morning it was a solid result, but he worked hard to tread water, at best.

Sales in the January half year were 1.2 per cent higher on a same-store basis, and they were up 1.7 per cent in the final 3 months of the half.

EBITDA was 7.1 per cent lower than the same half last year at $172 million, however. Earnings before interest and tax were down 10.5 per cent to $127 million, and net profit after tax was down 8.1 per cent to $81 million. Interim dividend was cut, from 10 cents to 9 cents a share, payable on May 8.

Myer didn't travel as badly as those profit declines suggest. Its sales were clipped as it refurbished three of its top 20 stores, and closed another, at Dandenong, in October. Costs are up partly because it is investing, in both its bricks and mortar store network and its online retailing offer.

Brookes is working hard to expand Myer's merchandise offer, shift sales to higher margin products including Myer's in-house brands, tighten the store network and lift the quality of service on the floor.

A down result is a down result, however. Myer's earnings momentum slowed in the half. Brookes says he sacrificed profit to support sales growth in the half, is investing in growth, and is confident that earnings will accelerate next year.

8:04am: Alright, here is the provocative report that says there’s no issue with housing affordability, which should spark some debate. (It’s not mentioned in the article but CommSec quotes an average disposable household income across Australia of a touch under $112,000.)

Frustrated Gen Y first-home buyers have no reason to blame parents or grandparents for the high cost of home ownership.

According to CommSec economist Craig James, when you compare home values (as measured by RP Data/Rismark) with household income as measured by the Australian Bureau of Statistics (ABS), housing affordability has hardly budged in a decade.

RP Data figures show the median price of a home taking in all regions was $450,000 in the December quarter and that ABS national accounts estimate of disposable income was $1007.5 billion with there being just over 9 million households across Australia, according to Housing Industry of Australia (HIA).

Using this data, Rismark calculated that the median home price was around four times disposable income in the December quarter, up from 3.9 times income in the September quarter 2013 and not much higher than the recent low of 3.7 times income in June quarter 2012 – “Equal to the best result in three years and just above the best (most affordable) result in a decade,” said Mr James.

“Gen Y has no reason to blame parents or grandparents – home affordability hasn’t really budged in the past decade. Home prices may be up, but so are disposable incomes.

“Over the past year the median home price rose by 5.9 per cent, outpacing the 1.7 per cent lift in income per household. But interestingly over the past decade, the average income per household has risen by 70.6 per cent, outpacing a 66.7 per cent lift in home prices.

“What does it mean? Simply, Australians have got richer over time. And, in fact, over the past decade, incomes have grown slightly faster than home prices. But broadly over the decade little has changed in terms of home affordability – it has gone sideways,” Mr James said.

Former APN News & Media chief executive Brett Chenoweth received a pay-out of $1.6 million when he was forced out of the Trans-Tasman media company in February of last year.

APN's annual report show that Mr Chenoweth was paid $2.57 million for the year to December 2013 including a salary of $836,000 - which included a three month leave of absence - and $100,000 to settle all his short-term incentive entitlements.

Mr Chenoweth was forced out of the company with three other directors after major shareholders led by Irish billionaire Denis O'Brien and Allan Gray refused to back their planned capital raising.

The Australian Financial Review revealed last week that Mr Chenoweth is set to emerge from his 12-month hiatus, joining a management buyout consortium which may include Tim Anderson, Paul Wiegard and Charbel Nader.

His replacement Michael Miller, who started at APN News & Media in June, was paid $899,000 for the period including a salary of $619,000 and short term incentives of $250,000.

Mr Miller has quickly moved to tidy up APN's asset base and last month received shareholder backing for a capital raising to buy out the remaining 50 per cent of APN's radio businesses from Clear Channel.

"The board believes these payments were fully justified," says APN in the annual report.

7:20am: Controversial Singapore group LionGold has indicated it is not about to abandon its pursuit of ASX-listed Unity Mining, despite last year's spectacular market slump.

LionGold gained prominence during 2012 and 2013 when it swooped on a collection of high-cost and troubled gold assets around Australia and the world, including the Ballarat fields made famous by the Eureka Stockade in 1854.

Unity - with its operating Henty mine in Tasmania and its Dargues Reef prospect in NSW - became the best of LionGold's assets when the Singapore group bought 13 per cent of the gold miner 10 months ago. The gold slump of 2013 took its toll on both parties, with Unity becoming a more marginal operation, and LionGold shares spectacularly collapsing in Singapore by almost 90 per cent.

But LionGold has indicated today it is still acquisitive for gold, despite last year's market trauma. The group has agreed to pay $2.37 million to increase its stake in Unity to 19.9 per cent under a share purchase plan run by Unity.

The sums involved are small but they will indicate to marginal gold producers everywhere that LionGold is still active in the market place.

Unity shares have tumbled nearly 30 per cent to 2 cents in early trade.

7:08am: Is this an early sign of increasing US-style shareholder activism in Australia?

VGI Partners, a $600 million hedge fund, has acquired a stake of up to 3 per cent in Echo Entertainment, the owner of The Star casino in Sydney, and is pushing for the casino operator's new management to restore value to what it calls the "cheapest casino stock in the developed world".

In a presentation to investors obtained by The Australian Financial Review, the fund, with offices in Sydney and New York, said that "as one of its larger shareholders" it would "liaise closely with management and the board to ensure equity value is restored".

The investor push to address Echo's perceived mismanagement may mark the start of an era of greater shareholder activism in Australia.

It follows a global trend that has shaken the corporate boards of some of the world's largest companies, such as Apple, Sony, and Procter & Gamble.

VGI, founded in 2008 by former Caledonia executive Rob Luciano, outlined itscase for building a stake in Echo that would make it among the largest shareholders, via the presentation to the fund's investors.

The fund cited recent management changes as a potential catalyst to address the poor performance of its "monopoly" casinos in Sydney and Queensland.

"VGI has met with Echo senior management a number of times already and now as one of Echo's larger shareholders we will continue to liaise closely with management and the board to ensure that equity value is restored," VGI said in a letter to investors.

"We were pleased to see a recent change of management, which we believe increases the probability of an earnings recovery and wiser capital allocation."

6:50am:Plenty of what came out of the FOMC meeting and Janet Yellen's first press conference as Fed chair had been expected: the decision to cut asset purchases by another $US10 billion a month to $US55 billion, the Fed dropped its explicit unemployment rate threshold of 6.5 per cent to move to a more qualitative take.

What has got the markets in a real bind has been Yellen’s press conference, when she was asked to clarify what was meant by this statement: The Fed sees interest rates remaining near zero ‘for a considerable time after the asset purchase program ends.’ Her response was a ‘considerable period of time’ equates to six months. That means rates could be raised six months after the asset purchase program ends.

This sent equity and bond markets into a tail spin and mass strength through the USD. The timeline for the end of the asset purchase program is open ended to ‘sometime in Q4’. However, on the current unwind, trajectory purchases could come to an end as early as October, which would suggest rates could be raised as early as March - something that was not expected at all and is a hawkish development.

US markets saw mass intraday moves on these statements, dropping from eight points in the green to 200 points in the red before recovering slightly. The market has not responded well to hearing that the monetary stimulus programs are coming to an end soon, and harder than expected.

Although today’s moves can be seen as an overreaction, once again communication from the FOMC has led to short-term volatility. I would expect to see Yellen’s next speech being much more scripted and without interpretation.

The market had looked like starting the day in a fairly benign manner, however the statements from the FOMC has changed all of that. We are currently calling the market down 34 points; however the fall in the AUD may see slight support for exporters.

Yellen shock: both US stocks (white line - S&P 500) and the Australian dollar took a hit when the Fed chair started her press conference.

6:41am: Fund managers digging through an investor presentation explaining Kingsgate Consolidated’s $59.4 million equity raising found a nasty little surprise: the company is being investigated for some payments made in Thailand, reports the AFR’s Street Talk column.

The following was buried in the small print on page 38 of the presentation: “The Company has been required by ASIC to produce documents in relation to suspected contraventions of the Corporations Act in relation to the affairs of the Company. The documents relate to payments made by the Company to a consultant for business and commercial advisory services, which the Company has received in connection with its Thai operations.

“The Company has produced those documents. The Company understands that ASIC’s enquiries are ongoing and will respond to any further requirements in accordance with its obligations. The Company believes that it and its Directors and officers have acted properly in connection with this matter.”

It was an interesting place to disclose such a matter. There was no mention in last month’s half-year report and nothing in September’s annual report.

Kingsgate said it had been doing business in Thailand for more than 25 years and would keep working with ASIC as required. The gold play last night closed the books on the $45 million institutional portion of the equity raising.

Myer’s result for the six months ending January was struck on total sales of $1.74 billion, up 0.4 per cent, andlike-for-like sales growth of 1.2 per cent.

Myer will pay an interim dividend of 9¢, compared with 10¢ a share previously.

In the three months ending January, like-for-like sales rose 1.7 per cent - well ahead of market forecastsaround 0.5 per cent - after rising 0.4 per cent in the October quarter and 1.7 per cent in the year-ago period.

In contrast, David Jones’ second-quarter same-store sales rose 2.1 per cent, the strongest growth for more than three years.

Myer chief executive Bernie Brookes said the business had now delivered comparable store sales growth in six of the last seven quarters and good progress had been made executing the company’s five-point plan.

However, Mr Brookes remains cautious about the trading environment for the rest of the year, citing continued pressure on discretionary income, uncertain consumer sentiment and higher costs.

6:24am: This morning the US Fed revealed it had abandoned its specific forward guidance target of 6.5 per cent unemployment in favour of a far more vague shopping list of factors including labour market conditions, inflation and financial developments.

“Clearly the US Fed is making policy up as they go,” wrote Perpetual’s head of investment market research, Matt Sherwood.

“But more importantly, the US central bank seemingly brought forward the timing and size of US interest rate rises from 2016 to mid-2015, but said that the rate will remain below its long-run level (4 per cent) even after unemployment and inflation are back to normal.”

“This indicates that the US Fed believes that the US labour market has less spare capacity than initially thought with three rate rises implied by the end of next year.”

But a survey by Reuters of top Wall Street economists suggested the US Federal Reserve will not begin raising interest rates until the second half of 2015, despite comments from Fed Chair Janet Yellen that suggested increases might come sooner.

Yellen, in a press conference following the end of this morning's two-day Fed meeting, said that it would be a "considerable period" between the end of the current bond-buying program and the beginning of interest-rate increases, but then added that it could be "six months or that type of thing."

The markets took the Fed's economic outlook as more hawkish than expected as it pointed to "sufficient underlying strength" in the economy to support an improved jobs market.

The Fed's forecasts showed several committee members see the fed funds rate hitting 1 per cent by the end of 2015. Bond yields rose sharply after the statement, and equities followed with their own sell-off after Yellen's "six months" remark.

"It is hard to know if Yellen wanted the market (which has taken it hard on the chin following that particular remark) to start thinking of a mid-2015 hike, but that is what was implied by her statement," said Millan Mulraine, deputy head of US research and strategy at TD Securities, who sees rate increases beginning in the fourth quarter of 2015.

However, most dealers did not alter their official views. Ten dealers of 17 polled see the initial rate hikes in the second half of 2015, with another four saying increases would not start until 2016.

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So... what is going on these days? I come back to have a squiz and the ASX is back to pretty much Sep 2013... so with all my cash in the bank... what should I do? Another holiday sounds good right now. I wonder how many people are burning after going long at 5440... buy the dips!

Commenter

Liberator

Location

SEQLD

Date and time

March 20, 2014, 2:00PM

Ah, is it just me or does anybody seeThe new improved tomorrow isn't what it used to beYesterday keeps comin' 'round, it's just realityIt's the same damn song with a different melodyThe market keeps on crashin'

Commenter

Bon Jovi

Location

Date and time

March 20, 2014, 2:10PM

The chart at 2:33 indicates that it's going to be generally downhill from here to 30th June. Too many vultures circling at the moment to make it safe to pop up your head.

Commenter

mitch of ACT

Location

Date and time

March 20, 2014, 2:11PM

The problem of buying a house requires creative thinking. Gen Y needs to realize that previous generations have had to sacrifice and compromise. A single Y can't afford a house but are there other options. Y's need to band together or get a partner. They need to save a large deposit. Forget the media driven ''images'' which many Y's worship. Alternatively Y's can howl and say its unfair. Maybe bloggers here could give advice on how to thread the housing needle.

Commenter

Wally

Location

Flynn

Date and time

March 20, 2014, 1:51PM

Wally: my partner is a doctor, I work in a very competitive corporate job that most people on the outside looking in think pays well. We have no other debt. Together we have enough of a deposit for 10% plus stamp legal costs. Any 2br flat (with one bathroom and maybe OSP if lucky) place worth buying in Sydney (ie. not within 6kms of the airport flight path or 20km as the crow flies out of the CBD) costs 700k at the moment. That is roughly $1k a week in expenses (strata etc) and interest costs. We can't afford that. If two supposedly highly paid Gen Y's can't afford that, how creative do we have to get? 20 years ago we could afford a 2br flat each.....

Commenter

DraftReader

Location

syd

Date and time

March 20, 2014, 2:12PM

Sorry that should say not within 6km of the airport for flight path/noise pollution reasons.

Commenter

DraftReader

Location

syd

Date and time

March 20, 2014, 2:15PM

@DraftReader: it is called a property ladder for a reason. I just had a look on Domain and I can see plenty of 2 bed places for $500k.Compromise and then trade up in 2 or 3 years. That's what I did.

Commenter

Irish Phil

Location

Date and time

March 20, 2014, 2:18PM

Well Craig James, what stage of the property bubble do you think we in then?

Craig James must be screaming at all his junior economist minions right now for the embarrassment.

Commenter

KaT

Location

Date and time

March 20, 2014, 1:28PM

Eds Well done on the housing affordability post. Great to see you went and doubted and analysed. You get the Michael West award this month.

Commenter

Harry Rogers

Location

Date and time

March 20, 2014, 1:24PM

Another buying opportunity? We've had a few "buying opportunities" since the ASX was 6800 in 2007 haven't we? LOL

Commenter

Nasty Boy

Location

Date and time

March 20, 2014, 1:23PM

Craig James numbers ? maybe he got mike baird to crunch 'em .

Commenter

there soon

Location

PNG

Date and time

March 20, 2014, 1:22PM

Great post @3.41pm.

Comment sought from CJ?

Commenter

ABC

Location

Date and time

March 20, 2014, 1:14PM

Ha!

Median house price $450,000.Median income $67,000

A ratio of 6.7x.

Nearly triple the long term ratio.

Bubble.

Commenter

Allan

Location

Prahran

Date and time

March 20, 2014, 1:11PM

@AllanMore like Median house price $533,750Median income $67,000A ratio of 8x.

Super Mega Bubble.

I am Gen Y. Affording a house is more depressing to dwell on than ones mortality. Mortgage...I get it now.;-(

Commenter

Styx

Location

Date and time

March 20, 2014, 1:32PM

"James’s numbers don’t add up."

Great work Ed's. That is what i call Financial Journalism.

PS: As mentioned by me and few other commentator picking period of 10 years also is misleading as it starts at 2004... begining of Mining Boom (high FIFO wages scew) and after 99-2003 period when house prices in capital cities doubled.

Commenter

DJ77

Location

Sydney

Date and time

March 20, 2014, 1:04PM

"Australian Stock market very high chance to bounce back in the afternoon as AUS market has its own character."

Or not.

Commenter

Allan

Location

Prahran

Date and time

March 20, 2014, 1:04PM

Eds - Nice analysis on Craig James dodgy affordability figures

Commenter

Love this blog

Location

Sydney

Date and time

March 20, 2014, 12:59PM

RE: "James’s numbers don’t add up."

Of course they don't. As I have posted on here numerous times, many people (including in Australia) who work in high paying banking and financial services roles are completely out of touch with how the majority of people live.

The so called "talking heads" who are represented as "professionals" and "experts" make calls and comments regarding things such as unemployment rates, income levels, debt levels etc that simply bare no resemblance to the realities in the streets and neighborhoods of the countries they are supposedly talking about.

Commenter

Gordon Akman

Location

Broadbeach

Date and time

March 20, 2014, 12:59PM

ASX200 under 5300! Is this beginning of a significant correction or just one of our infamous sell-off days?

I have had a shocker today - red ink everywhere!

Grabbing a 6 pack and heading down to the river to catch a fish, any tips on the best Murray Cod bait?

Commenter

Half Back Flanker

Location

Prahran

Date and time

March 20, 2014, 12:57PM

Day after Yellen comments. Will be forgotten as usual next week.

Commenter

GS

Location

Date and time

March 20, 2014, 1:33PM

I wonder how much Craig James is cringing with embarrassment right now?

Poor Craig, use the calculator on your phone or Windows Start Menu next time! lol

Commenter

GS

Location

Date and time

March 20, 2014, 12:56PM

Down she goes.

Commenter

Standing safely onshore

Location

Watching pollyannas sink

Date and time

March 20, 2014, 12:40PM

re Bubble chart

i Can't make up my mind- Delusion or Denial???

I'm in denial about my delusions!

Is there a correct answer?? Eds

Commenter

Ox

Location

Kensi Pk

Date and time

March 20, 2014, 12:32PM

Most probably it is bull trap.

Commenter

xyz

Location

Date and time

March 20, 2014, 12:51PM

Correct answer for Equities is "Public".Correct answer for Housing is "Delusional".

Commenter

DraftReader

Location

syd

Date and time

March 20, 2014, 1:34PM

Can anyone tell me how the bank benefits from paying me more via bonus saver account rather than a term deposit?

Commenter

Gen Y

Location

Perth

Date and time

March 20, 2014, 12:23PM

You need to meet certain criteria to be eligible for the bonus rate. For example no withdrawals and X amount of deposits per month. You'll find individuals will start off well and deposit and not withdraw then slowly the motivation is gone. If you are an keen saver and WONT touch the money you deposit it may be better off with the bonus rate than a TD. Jump on excel and play around.

Commenter

NSC

Location

Date and time

March 20, 2014, 12:50PM

Easy,

they get you interested with a good bonus saver rate then drop it whenever they feel like it.

At least witha TD your rate is locked in for the term

Commenter

banker

Location

Date and time

March 20, 2014, 1:00PM

The higher rate on the bonus saver is to drag you in. After a few months that bonus rate will drop to well below TD rates. The bank is banking on you not moving your money on when that happens. Most people are too lazy to care.

Commenter

mitch of ACT

Location

Date and time

March 20, 2014, 1:00PM

To hopefully not mirror some comments here and add a little extra:- Banks would prefer you to open a bank account because you become a "sticky" customer and will most likely consider their other products.- There are also usually cash flow requirements you need to meet per month to get those rates (ie. deposit $2000 a month etc) they hope that you will miss these and miss the bonus.

Commenter

DraftReader

Location

syd

Date and time

March 20, 2014, 1:41PM

"Investors bristled after Janet Yellen emerged from her first meeting as Federal Reserve chairwoman with some unsettling signals about the central bank's outlook for short-term interest rates."

US$100 trillion and counting. You have to ask yourself why are the richest countries in human history in so much DEBT? What are people in shocking DEBT doing wrong? What decisions have they made to ruin their finances?

Commenter

If Australia is so rich

Location

why are so many people in DEBT?

Date and time

March 20, 2014, 12:17PM

I see no mention of Mr Putin anymore...LOL...Russia is a Winner indeed.Well done, Mr Putin, you're truly a Saint.

Commenter

Prophet

Location

Sydney

Date and time

March 20, 2014, 12:02PM

I'm thinking Santos (STO) is starting to look like a buy! Any thoughts?

Commenter

"P" Plater

Location

Gundagai

Date and time

March 20, 2014, 12:01PM

It was $14 in 2007 and spruiked as a must for all Australian blue chip share portfolios LOL

Commenter

Short and Sharp

Location

Date and time

March 20, 2014, 1:02PM

i'd look at entry sub 13...if i decided to get back on board,but wasnt kind to me last time so off my radar.

Commenter

BearShapedBull

Location

MugPunters Lounge

Date and time

March 20, 2014, 1:04PM

i heard one analyst say good fundamentals but is in downtrend with sentiment overall in market

Commenter

dfatos

Location

Date and time

March 20, 2014, 1:05PM

TLS sub $5 mght be a better punt.

Commenter

BearShapedBull

Location

MugPunters Lounge

Date and time

March 20, 2014, 1:06PM

Definitely worth a good hard look for a patient longer term investment.

Commenter

Catch 22

Location

Date and time

March 20, 2014, 1:08PM

@233pm chartcheers eds.looks a little like the early start of the 2010-11 downtrend running to june.

Commenter

BearShapedBull

Location

MugPunters Lounge

Date and time

March 20, 2014, 11:57AM

The ASX graph helps me understand why I made most of my money in the first 4 months of the financial year...

Commenter

"P" Plater

Location

Gundagai

Date and time

March 20, 2014, 11:54AM

Eds That was a quick response. Because I used the AllOrds my chart looks somewhat different with 13/14 YTD above all of the rest. On the Y-axis I have the XAO numbers.Yes 11-12 was a bit of an odd one but the pattern was still pretty much the same as the other years, particularly from this time of the year on, just lower down the chart.Continuing the chart of 13/14YTD towards 30/6/14 using averages of the prior years gives me an estimate of the AllOrds of just a little above 5000 at 30/6/14

Commenter

mitch of ACT

Location

Date and time

March 20, 2014, 11:52AM

Anyone know why Aristocrat (ALL) is up 5%?

Commenter

dflatos

Location

Date and time

March 20, 2014, 11:42AM

Shure proof we are in "denial" stage of housing bubble has to be the Craig James load of nonsense, using every tool of statistical forgeru to prove housing is "affordable". $112K disposable income.. maybe in Mosman. Then setting baseline from 2004, that is begining of Mining Boom where 10% of FIFO workforce distorts averages for the other 90%, and just after 99-03 spike where most of the Housing bubble occured.

Adjust the calculation little by examining 15 years growth in wages Not 10... Or exclude top and bottom 5% of very high / very low earners and calculations are completly different.

Also never mind that in that 10y time period petrol has gone up 50%, energy 120% , health insurance 70% etc etc. Then again its Commsec, people whose credibilty can be summarised with two words, "Storm Capital"

PS: In un related news Mac.Bank about to release report proving Sydney Airport Fees are falling and Parking costs are very very low.

Commenter

DJ77

Location

Sydney

Date and time

March 20, 2014, 11:42AM

Amazing since computers became mainstream how people seems to worship at the altar of graphs. They genuinely believe its some sort precursor to the future perhaps better to follow astrology as it appears to have a better track record?

Also be aware that people always search for analysis and predictions which suit their beliefs and comment on the same as if it was valid evidence of their belief.

Trap for all investors.

Commenter

Harry Rogers

Location

Date and time

March 20, 2014, 11:39AM

So we should ignore charts of the weather. The chart of the ASX shows the "seasonal" fluctuations in the index that seem consistent year-on-year.

Commenter

mitch of ACT

Location

Date and time

March 20, 2014, 12:40PM

I don't presuppose that people will stop reading the stars for their future because of their inbuilt beliefs.

Commenter

Harry Rogers

Location

Date and time

March 20, 2014, 1:05PM

RE: 2:33pm chart;

Sell in May and go away... except we didn't get our usual Santa rally this FY either!

Commenter

GS

Location

Date and time

March 20, 2014, 11:39AM

No-one will be waiting till May to sell and the charts show that the decline begins in mid-April for the AllOrds chart and even earlier for the ASX200.

Commenter

mitch of ACT

Location

Date and time

March 20, 2014, 12:48PM

sold out of EPW @2.52picked up 6% + ff 6c divd

Commenter

BearShapedBull

Location

MugPunters Lounge

Date and time

March 20, 2014, 11:35AM

Great day for topping up...SBM is a real gift at $0.355, I like it!

Commenter

Half Back Flanker

Location

Prahran

Date and time

March 20, 2014, 11:35AM

Why don't you post some trades instead of childishly trying to bait others who already have a lot of wins on the board?

Your constant juvenile comments are extremely tiresome.

Commenter

Allan

Location

Prahran

Date and time

March 20, 2014, 11:41AM

"Great day for topping up...SBM is a real gift at $0.355, I like it!"

MOD I'M POSTING WITHIN YOUR GUIDELINES

THIS IS A BAIT. PLEASE REMOVE IT!

Commenter

Allan

Location

Prahran

Date and time

March 20, 2014, 12:00PM

I am kicking myself now, could have got them at $0.34, but that's the game, can never pick the absolute top or bottom.

Not sure what @ Allan is on about as this is the trade I actually made, 10000 @ $0.355

Commenter

Half Back Flanker

Location

Prahran

Date and time

March 20, 2014, 12:43PM

"The Abbott government's first attempt to repeal the carbon tax has failed."

Let's see if Tony and the Tories have the stomach for a double dissolution on this one issue which would heap global ridicule on them.

Commenter

Allan

Location

Prahran

Date and time

March 20, 2014, 11:28AM

They would decimate the ALP if this was to happen, absolute carnage for the RUDDerless ship. Bring it on!

Commenter

Aussie Al

Location

Adelaide

Date and time

March 20, 2014, 11:41AM

They only need to wait until July 1.

Commenter

jusbern

Location

Date and time

March 20, 2014, 12:00PM

Well, well.

They just might go for the double dissolution and probably should.

This carbon tax has no environmental purpose, is economically unsound. Further, it was a clear election platform, and we all know how we as a nation voted.

I, for one, do not appreciate the Sarah HYs and Lee Rhiannons thumbing their nose at the majority of Aussies, and indeed at democracy itself.

R.

Commenter

Roadsta

Location

BV

Date and time

March 20, 2014, 12:09PM

We all know it will happen soon when the senate mandate changes this year

Commenter

linux

Location

Date and time

March 20, 2014, 12:12PM

Double Dissolution - yes please. But even our hairy-chested PM won't have the guts to do that, particularly after the upcoming Budget.

Commenter

mitch of ACT

Location

Date and time

March 20, 2014, 12:22PM

Your Right. The Carbon Tax Does nothing to prevent pollution because it is a Tax on Production and Not Consumption. If it was a Tax on Consumption then Companies would be forced to design green products and not just ship the pollution (Production and Jobs) overseas.

Commenter

Styx

Location

Date and time

March 20, 2014, 1:01PM

The carbon tax is a tax on both production and consumption of electricity since electricity cannot be stored once produced. The higher cost of production due to the carbon tax results in a higher cost of consumption as the carbon tax is passed on. That higher cost helps reduce consumption, as is happening and also encourages a move towards non-carbon energy, eg wind & solar, that is also happening.

Commenter

mitch of ACT

Location

Date and time

March 20, 2014, 1:43PM

We are in the Bull Trap part of the cycle. Anyone else want to take a punt?

Commenter

Wayfarer

Location

Date and time

March 20, 2014, 11:28AM

Enthusiasm

The PEs aren't silly yet.

Commenter

Elric

Location

Melbourn

Date and time

March 20, 2014, 12:08PM

today might even be a bear trap!

Commenter

Heads or Tails

Location

ASX Caz

Date and time

March 20, 2014, 12:22PM

So what will be found first, MH370 or Tony Abbott's ability to answer a direct question on what he knew nd when about Sinodinos and his involvement with AWH. There is a real suspicion afoot that Abbott knew there were shady dealings going on before Sinodinos was appointed to the Ministry.

Commenter

mitch of ACT

Location

Date and time

March 20, 2014, 11:23AM

@ Mitch, the public will accept with the early decision to stand down much more readily than accept the previous Govt's credibility on handling of the Craig (aka Jeff) Thomson affair.

Chalk and cheese the way both matters have been dealt with!

Commenter

Aussie Al

Location

Adelaide

Date and time

March 20, 2014, 11:51AM

Eds I thought this site was being moderated to weed out meaningless political comments?

Commenter

Kane

Location

Date and time

March 20, 2014, 11:56AM

"There is a real suspicion afoot that Abbott knew there were shady dealings going on before Sinodinos was appointed to the Ministry."

Is this the sort of "Inquisition" comments we are now faced with. Evidence please.Some people from both side seem to take real pleasure in trying to besmirch people's reputations.

Pyne was expert at it now we have the coward football crowd slandering. Eds I dont agree with censorship as you know but what gives these people free reign to speculate on the efficacy of people.

Commenter

Harry Rogers

Location

Date and time

March 20, 2014, 12:04PM

Yes much like the Mark Thompson fiasco. It just proves in general our pollies cannot be trusted.

You were defending Sinodinos and have had the rug pulled out from under you.

Commenter

Allan

Location

Prahran

Date and time

March 20, 2014, 12:39PM

@Harry surely you are aware of the items raised in this article. http://www.smh.com.au/federal-politics/political-opinion/tony-abbotts-surprise-cabinet-call-on-arthur-sinodinos-proves-shrewd-20140318-350gm.htmlThere was surprise that Sinidonis didn't get a plum Cabinet post (he was eminently qualified) and now we know why.

Commenter

mitch of ACT

Location

Date and time

March 20, 2014, 1:49PM

MitchThey are called rumours and conjectures. Clearly unethical and downright cowardly. If proven no problem

Commenter

Harry Rogers

Location

Date and time

March 20, 2014, 2:15PM

The bubble cycle chart is a good one.

I do not think we have returned to mean. Because, even now, the good economic forecasts of Federal Reserve take the stock market down not up.

There are sellers of greed services even now but the buyers are cautious!!!

Commenter

Makes Sense

Location

Rowville

Date and time

March 20, 2014, 11:21AM

Morgab Stanley: "Based on our analysis, our baseline case is that China may slow from the current level of 7.7% Gross Domestic Product (GDP) growth to 5.0% over the next two years. A disorderly unwind could take Chinese growth down to 4% in a shorter time frame with potentially disastrous consequences for levered Chinese assets (banks, property) and the entire commodity supply chain (commodity stocks, equipment stocks, commodity-sensitive countries and their currencies)."

Oh dear, a hard landing in China is becoming mainstream.

Commenter

Allan

Location

Prahran

Date and time

March 20, 2014, 11:08AM

Landowners vs gas:

What a shame. All that this uneven negotiating position will do is that gas operators will BUY the land. Yes they will pay over the odds, but they will get the gas. The farms however, will become unproductive.

In Alberta, Canada agriculture and the oil patch have worked this out. The oilers pump what they need from below, the cows and the canola grow on top. Yes, they have their issues, but it works.

A sop, a waste, and a step backwards.

R.

Commenter

Roadsta

Location

Brisvegas

Date and time

March 20, 2014, 10:58AM

Canada is not the driest inhabited continent on earth. Contaminating underground water reservoirs in Canada wouldn't have the same devastating impact that it would in Australia.

Commenter

Fred

Location

Date and time

March 20, 2014, 11:23AM

The gas producers will buy one area of land to get the gas and destroy and pollute the water table for surrounding properties.

Commenter

mitch of ACT

Location

Date and time

March 20, 2014, 11:28AM

sold 600 GEM @ 4.57...take 1/2 out

Commenter

BearShapedBull

Location

MugPunters Lounge

Date and time

March 20, 2014, 10:58AM

I was going to say that there is an uncomfortable similarity between that Bubble chart on the left & GEM's chart.

Commenter

mitch of ACT

Location

Date and time

March 20, 2014, 11:15AM

took the trade...cycle into DWS 2000 @ 1.20growth for yield

Commenter

BearShapedBull

Location

MugPunters Lounge

Date and time

March 20, 2014, 11:22AM

I don't believe this, the Chinese economy with its transparency and free market approach will only ever grow by a buzzillion %....investors are relying on it!

Commenter

shemp

Location

melb

Date and time

March 20, 2014, 10:40AM

"Cash-strapped Chinese are scrambling to sell their luxury homes in Hong Kong, and some are knocking up to a fifth off the price for a quick sale, as a liquidity crunch looms on the mainland."

I wonder how much they will discount their 40sm flats in Australia by?

Commenter

Allan

Location

Prahran

Date and time

March 20, 2014, 10:38AM

It will be the double whammy of the century - Chinese investors dumping Australian property on the market and iron ore shipments to China grinding to a halt.

Housing boom!

Commenter

Dr No

Location

Sydney

Date and time

March 20, 2014, 11:55AM

Re the story on farmers v coal seam gas miners.

In the driest inhabited continent on earth, why the hell we would embark on projects that threaten our water is beyond me.

This is one of the scariest examples of short term profit at the expense of he future.

Commenter

Fred

Location

Date and time

March 20, 2014, 10:33AM

Trying to farm marginal land by clearing and salting the water table is as bad,with overgrazing,overstocking.....so both evils have a detrimential effect on the land and water.

Commenter

BearShapedBull

Location

MugPunters Lounge

Date and time

March 20, 2014, 10:47AM

The idea that "the land has been cleared" by farmers is an urban green notion. It should by now be widely understood that in pre-1788 Australia, Aboriginal use of fire was so pervasive that open grassland was at least as common as it is today. Thick forest did not dominate Australia in 1787.

It is in the interests of farmers (especially family farmers who intend to pass it on to their children) to look after their land. It is in the interests of farmers to fight salinity, it is in the interests of farmers to fight introduced pests like rabbits and foxes. Wholesale clearing leads to erosion, which is not in the interests of farmers.

One exception, I'll grant, has done enormous damage in Australia and should not continue is the growing of cotton. It needs enormous quantities of water and is not suited to this land.

Commenter

Fred

Location

Date and time

March 20, 2014, 11:17AM

"The idea that "the land has been cleared" by farmers is an urban green notion"

No it is not.

"Overall, Australia has lost nearly 40% of its forests, but much of the remaining native vegetation is highly fragmented. As European colonists expanded in the late 18th and the early 19th centuries, deforestation occurred mainly on the most fertile soils nearest to the coast. In the 1950s, southwestern Western Australia was largely cleared for wheat production, subsequently leading to its designation as a Global Biodiversity Hotspot given its high number of endemic plant species and rapid clearing rates. Since the 1970s, the greatest rates of forest clearance have been in southeastern Queensland and northern New South Wales, although Victoria is the most cleared state."

http://jpe.oxfordjournals.org/content/5/1/109.full

Commenter

Allan

Location

Prahran

Date and time

March 20, 2014, 11:25AM

Allan,

Of course I am not arguing that there hasn't been land clearing. I am saying in many parts of Australia before European arrival the land was cleared just as often and just as thoroughly by Aboriginal use of fire. Bill Gammage's "The Biggest Estate on Earth" covers the topic especially well.

Commenter

Fred

Location

Date and time

March 20, 2014, 11:55AM

And as your referenced book points out European management of the land has devastated Australian forests by clear felling large section of forests and not managing the remainder.

So your green urban myth comment is dead wrong.

Commenter

Allan

Location

Prahran

Date and time

March 20, 2014, 1:17PM

Until Janet Yellen was appointed, I had never heard anyone or anything called 'dovish'. Is she so different that she earned her own adjective?

What does it mean?

Commenter

NickH

Location

Melbourne

Date and time

March 20, 2014, 10:31AM

"dovish" means that she wants to continue printing money out of thin air and thus shooting two birds with one stone. 1. The out-of-tough elite in Washington can continue to mismanage the economy and run astronomical budget deficits. 2. The owners of the Federal Reserve will continue to make money, a lot of which will be fed back into the political system to keep away candidates who support accountability and reform.

Commenter

Dr No

Location

Sydney

Date and time

March 20, 2014, 10:58AM

Nick H - opposite to Hawkish.

In general terms it means she will be less inclined to ratchet up rates quickly...unless inflation genie escapes from bottle.

So much for that technical graph for GBPAUD signalling a sell on display yesterday. GBPAUD up 200 points since.

Commenter

Ridgy

Location

Date and time

March 20, 2014, 10:21AM

Thanks for pointing it out. I wrote a comment about technical analysis yesterday, following this dribble about AUDGBP.

A few responses mostly said technical analysis works because people think it works and therefore it becomes a self-fulfilling prophecy.

Well, if anyone wants to invest on that basis, my very best wishes to you. Greater fool, herd mentality springs to mind.

I will leave technical analysis to those who possess "A Beautiful Mind".

R.

Commenter

Roadsta

Location

Brisvegas

Date and time

March 20, 2014, 11:20AM

How will the Yanks service their massive debt if interest rates rise?

Commenter

MrSteve

Location

Date and time

March 20, 2014, 9:54AM

RPData and Chris Joye have always been full of it when it comes to housing affordability.

The median house price is $450,000.The median household income is @$75,000.

That gives you a ratio of 6x.

The long term average for house price to single full-time male wage ratio is 3.5x. For households it is more like 2.5x.

Yes more women are working but male hours have dropped almost a commensurate amount.

Real house prices have tripled over the last 30 years and they are not supported by real household wage increases.

Commenter

Allan

Location

Prahran

Date and time

March 20, 2014, 9:48AM

But people are not buying homes with income at the moment.I'd love to see some stats on what the median inheritance values have done over the last 10-20 years.

Commenter

Irish Phil

Location

Date and time

March 20, 2014, 10:21AM

Exactly. Some of various property spruikers figures are laughable. They say "Yeah but many households are two incomes now so they have much more income and capacity to service a big mortgage".

So what that basically means is previously it took one income to support a middle class lifestyle and now it takes two incomes to live the same quality lifestyle. No wonder there is so much unhappiness around and people always posting on FB etc "Thank god it's Friday" and "I hate Mondays". Their lives are a misery. Constantly working longer hours to afford the same quality of life that previously only took one average full time income to achieve.

Commenter

Gordon Akman

Location

Broadbeach

Date and time

March 20, 2014, 10:24AM

I see so FHB's have deserted the market because they're waiting for their parents to die? In that case they will rent into their 60's. And renting is cheaper so they will be better off.

Commenter

Allan

Location

Prahran

Date and time

March 20, 2014, 10:42AM

@Gordon Ackman : A middle class lifestyle is significantly different now to what it was 20-30 years ago and it costs a lot more. You only have to compare your own childhood toys and entertainment to what kids have today to see why 2 incomes are needed. Lots of people live very happily on a single income, if they are willing to do without the latest consumer goods/ overseas holidays/ new car every 3 years.

Commenter

confused

Location

syd

Date and time

March 20, 2014, 10:53AM

LOL!

The claim is that affordability hasn't moved in 10 years. You yourself Allan regularly harp on that Sydney prices have only increased 0.9%pa in that time so, given wages have grown 1-2%pa, he is essentially agreeing with you!

Commenter

Life Is Good

Location

The Real World

Date and time

March 20, 2014, 10:54AM

Absolutely right, Allan and Gordon. The only people who have a clue what's really going on are those with a little suspicion, a little logic and common sense, and can make basic mathematical calculations. Sadly, that's not the majority. The swiftest way to misery these days is to believe everything you read!

Commenter

Gareth

Location

Sydney

Date and time

March 20, 2014, 11:00AM

And I have explained to you many times, the bubble in Sydney was formed over 10 years ago and has not deflated yet. You constantly bring that up as though that is some sort of counter argument which it isn't.

Commenter

Allan

Location

Prahran

Date and time

March 20, 2014, 11:06AM

putting aside the more volatile $1m plus market, it certainly is a damn site easier envisaging a cool drop of $200k than a rise of the same amount.

Commenter

brian

Location

Date and time

March 20, 2014, 11:12AM

LOL at the Cause and Effect fail in this post. Increased costs did not force families to move from one income to two incomes. It's the other way around: Second Wave Feminism resulted in many families moving from one income to two incomes which lead to increased asset prices and costs due to greater disposable H/hold income.

Commenter

Life Is Good

Location

The Real World

Date and time

March 20, 2014, 11:23AM

I don't actually want to buy a house.The bubble can keep expanding or go pop tomorrow for all I care. I just want to live my life. Call me crazy.

Commenter

Gen Y

Location

Perth

Date and time

March 20, 2014, 12:11PM

I'm a bull, but man do I love days like this!droppppppp!

Commenter

no banks .. no party!

Location

Date and time

March 20, 2014, 9:39AM

Eventhough itching to buy a couple of stocks just waiting as tomorrow is friday & we all know how ASX behaves, dont we !!

Commenter

clueless

Location

wonderland

Date and time

March 20, 2014, 9:22AM

Up the stairs and down the elevator shaft?

Commenter

Penny Dropped

Location

Date and time

March 20, 2014, 9:27AM

No elevator shaft yet. Jumping the gone young Allan's apprentice. The force is strong with you!

Commenter

Screen watcher

Date and time

March 20, 2014, 9:45AM

yes. it makes brokers rich and buyers poor.would you be interested in some life / pet / income / house / contents / car / travel insurance to go with those shares?

Commenter

smilingjack

Location

Date and time

March 20, 2014, 9:48AM

Actually looking back over the last couple of years the market has been up on a Friday by a lot more than it's been down. In fact since 1/7/12 half of the increase in the AllOrds occurred on Fridays, 622 points out of 1238. Strange but true. I think the reaction on the Dow to what Yellen said was overdone and so the DOW will likely come back tonight. We should follow but by how much is anyone's guess.

Commenter

mitch of ACT

Location

Date and time

March 20, 2014, 10:03AM

"CommSec quotes an average disposable household income across Australia of a touch under $112,000"

December 2013 ME Bank household financial comfort study found:

The number of households struggling to save each month increased 2% to 51% in the past 6 months, while 46% have less than $5000 in savings for an emergency. Only 26% are building up ‘rainy day’ savings, 11% are spending more than they earn and 5% are using equity in their own home to make ends meet month to month.

Oh dear

http://www.mebank.com.au/about-us/about-me-bank/me-bank-reports

Commenter

dog box

Location

Date and time

March 20, 2014, 9:19AM

Eds, re the ASX 200 chart. You probably have the data so here's a little challenge for you. Construct a chart of the AllOrds for the each of the years 9/10 to 13/14 YTD with each year overlaid on top of the other. It's an eye opener and clearly shows the likely trading activity in coming months. There's a fair degree of consistency between the years in the ups and downs.

Useful link, but I already have all of the data going way back. The trick is to overlay each F/Y on top of the others to get an idea of what happens and when. And from that what is likely to happen in coming months just falls into place.

Commenter

mitch of ACT

Location

Date and time

March 20, 2014, 10:10AM

Which punt looks less risky - SLR or BDR ?

Commenter

clueless

Location

wonderland

Date and time

March 20, 2014, 9:09AM

Bit like asking if you'd rather get attacked by a shark or a crocodile.

Commenter

NickH

Location

Melbourne

Date and time

March 20, 2014, 9:29AM

NST?ouch at BDR,but waaaaay better than SLR.cut a chicken open.

Commenter

BearShapedBull

Location

MugPunters Lounge

Date and time

March 20, 2014, 9:48AM

BDR still looks good to me, at the current gold price they should have their debt paid off in no time. I still think there is more positive news to come about duckhead as well.

Commenter

craig

Location

Date and time

March 20, 2014, 9:58AM

The problem is that I know what's wrong with SLR & maybe that's priced into its SP but dont know whats the issue with BDR !! NST is the best atm but am waiting for a better entry price.

Commenter

clueless

Location

wonderland

Date and time

March 20, 2014, 10:03AM

So US stocks go down because interest rates flagged to rise to non-emergency levels in the next 12 months.

So tomorrow everyone will realize that the reason the rates are going up is because the US economy is powering up nicely...and the stocks will rise.

Didn't we have this exact situation when they announced tappering? OMG bad news.... oh wait it is good news.

What highly manipulated markets we all invest in.

It doesn't matter if rates go up as long as unemployment drops. In Australia that is not guaranteed with the nut bags currently in power. So Allan may have a point about "pop"

Commenter

Elric

Location

Melbourne

Date and time

March 20, 2014, 8:51AM

So you are saying this is bad news: The number of people employed full-time rose by 80,500, the biggest increase since August 1991 and the second-largest on record, the statistics bureau said 14/3/14, not bad for nuts bags who've only been in the last 5 minutes imagine what they can achieve in years.

Commenter

oh some people!

Location

Date and time

March 20, 2014, 9:18AM

So the LNP claim the bad things about the economy are all Labor's fault but the growing of full time jobs (if real) is a direct result of 5 minutes of LNP policy? What a shock. Some people!

When the LNP desolation of the work force and entire industries actually hits the bottom line of employment figures...then you'll see what nut bags can do.

Commenter

Elric

Location

Melbourne

Date and time

March 20, 2014, 9:39AM

banks are in the business of making money. not helping people. if they make an announcement that rates will be going up in 15 - 21 months time ( thats a joke in itself ) than its because they are trying to get people to act now to make more money for the banks. maybe they are sick of people making additional payments and want them locked in now.seriously you think banks would do something to help creditors?

Commenter

smilingjack

Location

Date and time

March 20, 2014, 9:54AM

The LNP brought some certainty, people are now more confident that things aren't going to get any worse, now it's about riding the last of the bad decisions of the last government out. Eg: people now know that when they wake up in the morning or sit down to watch the news at night, they are not going to be confronted by some stupid idea, like shifting garden islan, or the NBN, or the disability scheme that actually has not had any money allocated to it or the children bonus that will be paid by a mining tax that is actually not raising any money.

Commenter

oh please,

Location

Date and time

March 20, 2014, 11:37AM

Is anyone aware of VMT and DDT? I have just bought a handful hoping it will shoot off in the next year or two.

VMT have recently opened 3 more stores in China totaling 13 stores in total. They are aiming to open over 40 stores by the end of thee year.

They are also looking to expand in Brazil, Italy, Hong Kong and Vietnam.

DDT create tiny microscopic discs.Thousands of DataDots are sprayed or brushed onto products. The unique code on each DataDot is then stored on a secure national database, which can be accessed by police if the product is stolen. The DataDots are almost invisible to the naked eye. It’s virtually impossible to locate and remove all the DataDots,making it extremely difficult for thieves.

Amongst others, the company currently has Subaru Australia as a customer and is cutting a deal with the leading Brazilian car manufacturer. It is also negotiating with a wine making company in China.

Both these companies seem to have a at future ahead even if half of these negotiations are successful.

Commenter

JimmyM

Location

Date and time

March 20, 2014, 8:42AM

i looked at DDT and held for awhile 2013...went nowhere basically so got out even.VMT potentially a winner with chinas pollution problem.only speedhump may be that once hey get hold of it [in china] they'll make it cheaper and better and negate the vmoto out of market....hmm

Commenter

BearShapedBull

Location

MugPunters Lounge

Date and time

March 20, 2014, 8:52AM

I held DDT for a while as well. In the early stages I had some really good returns from it but later on it did to my results what its namesake does to insects. It's one of those stocks that should do well as its technology meets a crucial need in industry but it can never seem to make headway.

Commenter

mitch of ACT

Location

Date and time

March 20, 2014, 9:07AM

Hmm.. thanks BSB and Mitch..

The guys from Money Morning seem to think both these company are on the verge of a breakthrough.. especially VMT who are rapidly increasing production.

l guess l'll hide it from my portfolio and may be look at it in a couple of years and hope the companies are still around :)

Commenter

JimmyM

Location

Date and time

March 20, 2014, 9:18AM

Reality check for the xenophobes...Australia demonstrates that housing affordability problems are entirely home-grown, not imported.

I wonder how those mugs that paid 2.99 for WTF yesterday are feeling today.

Commenter

Ridgy

Location

Date and time

March 20, 2014, 8:37AM

asked around the room..... feeling like they just lost 10%.

Commenter

BearShapedBull

Location

MugPunters Lounge

Date and time

March 20, 2014, 8:44AM

hahaha BSB I like it. How about:

Ask around the room, now give yourselves an uppercut.

Commenter

Ridgy

Location

Date and time

March 20, 2014, 8:53AM

One thing your good man James forgot to factor in here .. the cost of everything else! ..

Commenter

Mick

Location

Date and time

March 20, 2014, 8:30AM

It is days like this when I question the need to sit in front of a screen all day watching the big end of town take advantage of me. Should just stay retired and travel.

Commenter

Self Funded Retiree

Location

la la land

Date and time

March 20, 2014, 8:27AM

We now appear to have reached the "muddled" phase in the investment cycle.

Nobody really knows which way economies will track and in fairness they never really did just "us public" were more inclines to believe them 5 yrs ago.

My guess, (take it at your own cost) is this will continue until the end of the year irrelevant of minor shocks. People can't even afford to go to war at present!

Keep yourself occupied by dabbling in and out and be happy that you can.

Disclaimer: Most of the time I either make money or lose it.

Commenter

Harry Rogers

Location

Date and time

March 20, 2014, 8:21AM

A big 4 bank says houses are cheap, borrow more.

Nobody dies of shock.

Oh and the median household income is @ $65K.

CommSec's claims that average disposable household income across Australia of a touch under $112,000 is fantasy.

"Household net-adjusted disposable income is the amount of money that a household earns each year after tax. It represents the money available to a household for spending on goods or services. In Australia, the average household net-adjusted disposable income is 28 884 USD a year, higher than the OECD average of 23 047 USD."

http://www.oecdbetterlifeindex.org/countries/australia/

Commenter

Allan

Location

Prahran

Date and time

March 20, 2014, 8:20AM

The boss of the person that made the $112,000 calculation should sack him as this is evidence they are an imbecile. Not every suburb is Mosman or Canterbury

Commenter

Elric

Location

Melbourne

Date and time

March 20, 2014, 9:05AM

$112k seems reasonable. It is "Household", not individual.

Commenter

Irish Phil

Location

Date and time

March 20, 2014, 9:11AM

Also, it states it is an "average", not the median.

Commenter

Irish Phil

Location

Date and time

March 20, 2014, 9:13AM

Yes and that's the median for total income which means the average would be maybe $85K

The average household DISPOSABLE income is @ $30K.

They are out by 85% on disposable income.

If that's a typo by Commsec and they meant gross income they would still be out by 24%.

Commenter

Allan

Location

Prahran

Date and time

March 20, 2014, 9:40AM

Still going long on SBM Allan? I remember u were in at .38 cause I followed u in the next day after it dropped 5%. U still feeling good about this company? Where's ur stop loss?

Commenter

Screen watcher

Date and time

March 20, 2014, 9:43AM

everyone knows that "averages" can be misleading. Commonwealth bank have a vested interest in seeing the housing market go from strenght to strength, hence it is obvious why they would use the average as opposed to the median.

Commenter

perspective

Location

lesn

Date and time

March 20, 2014, 9:46AM

no Wally - aussie market going nowhere, but interest rates worldwide will rise if the US does, so get ready to be stung aussie home owners - I cant wait to witness the pain

Commenter

Jed

Location

Burwood

Date and time

March 20, 2014, 8:18AM

"CommSec quotes an average disposable household income across Australia of a touch under $112,000"

LOLS!!!!

Commenter

GS

Location

Date and time

March 20, 2014, 8:12AM

Perhaps China, certainly not Australia....baked beans for mortgagees and recycled "gas" to power their cars. oioioi

Commenter

Realist

Location

Sydney

Date and time

March 20, 2014, 10:19AM

@Panhandler...Could you elaborate please. You think they have?

Commenter

JohnBB

Location

Date and time

March 20, 2014, 8:02AM

"Wall Street, You will never find a more wretched hive of scum and villainy.”

Commenter

Obi-Wan

Location

Date and time

March 20, 2014, 8:00AM

I'm a vile scumbag according to my wife and friends...get over it...make money son.

Commenter

no banks ..no party!

Location

Date and time

March 20, 2014, 8:59AM

Could anyone please tell WHY today's turnover for many stocks up to 10:30am are VERY HIGH?Thank you.

Commenter

Question?

Location

Date and time

March 20, 2014, 7:58AM

Commsec has made a report that will hit the media soon. "Housing is just as affordable as 10 years ago". The figures used are just unbelievable (literally)...I hope when GenY get the political reins, this stuff will be made retrospectively illegal. There will be a price to pay for all the greed of individuals destroying this country.

Commenter

JohnBB

Location

Date and time

March 20, 2014, 7:53AM

Debt serf boom!

In Housing we trust!

Commenter

Opinion Only

Location

Melbourne

Date and time

March 20, 2014, 8:20AM

Lol It is no surprise that they are still trying to convince people that housing in Melbourne and Sydney is not overvalued.

They would not have the nerve to say there is a housing bubble which is a matter to be taken seriously.

China's bubble will burst it is only a matter of when. Just look at the number of vacant properties in various parts of China

Commenter

Matt

Location

Date and time

March 20, 2014, 8:35AM

Housing affordability measured by an economist on a piece of paper and housing affordability as measured by the man in the street. Worlds apart. Someone needs to get a grip on reality and it's not the man in the street. It all depends on location. Here in Canberra housing is getting cheaper by the day as the gov't sacks the public servants providing services and they leave town to go and live back in Sydney or Melbourne and push up demand and prices there.

Commenter

mitch of ACT

Location

Date and time

March 20, 2014, 8:42AM

Could anyone please tell WHY today's turnover for many stocks up to 10:30am are VERY HIGH?Thank you.

Commenter

Question?

Location

Date and time

March 20, 2014, 7:52AM

Good question and interested to know as well. I noticed many large orders for CBA and the other banks just prior to open.

Commenter

"P" Plater

Location

Gundagai

Date and time

March 20, 2014, 8:03AM

Futures expiry

Commenter

henry

Location

Date and time

March 20, 2014, 8:07AM

Futures expiry

Commenter

Chris

Location

Sydney

Date and time

March 20, 2014, 8:32AM

Its called a sell-off

Commenter

BearShapedBull

Location

MugPunters Lounge

Date and time

March 20, 2014, 8:42AM

So from what I understand Clive Palmer still has not paid last years' mining tax. Yet now he is threatening not to scrap it as agreed by the majority of voters on the 7th of Sep 2013 because a few children might miss out. Does Clive not understand that it is all children who are entitled to this bonus not just the war veterans children? and that maybe if he had payed on time some of this money could've been used as he is requesting.

Commenter

this is a democracy clive, the majority voted, so do the right thing

Location

Date and time

March 20, 2014, 7:51AM

Yep it is a democracy and as an elected rep he can vote any way he pleases to benefit his electorate. He doesn't need to follow the herd.

Commenter

Elric

Location

Melbourne

Date and time

March 20, 2014, 8:37AM

The majority of voters don't want this tax and his electorate was told he is against this tax so hence why he got elected. So ye he should do the right thing and vote to scrap it. But I think Clive is using the veterans children excuse to perhaps not pay last year's tax, jmo. If he was so worried why doesn't he make a donation so instead of giving them a paltry $ 211, he could even choose to donate more. hmmmm too much to ask?!

Commenter

this is a democracy clive, the majority voted, so do the right thing

Location

Date and time

March 20, 2014, 8:51AM

Potassium Cyanide (KCN) shows the danger of buying into an equity raising in the hope of of making a quick buck. Some gloated that the raising at $1 meant they cold buy and make a quick profit - and it wasn't a problem. The 30% dilution was major in a sector that is week, and now we see the results as it opens below $1.00, touching $0.92.

Commenter

Calculator

Location

Date and time

March 20, 2014, 7:51AM

Good morning all.

Commenter

Up the stairs

Location

Down the elevator shaft

Date and time

March 20, 2014, 7:48AM

Yes, John BB and they have worked hard for it.

Commenter

Panhandler

Location

Date and time

March 20, 2014, 7:46AM

Sold half my BHP at 35.580.

I want to get back in at some stage in the next few months and the price is today lower than 35.580. Do you think it has further to fall in the short term?

Commenter

Fred

Location

Date and time

March 20, 2014, 7:42AM

If only we knew @ Fred. I am waiting as well and expect $35 to hold, but will wait a while. Hasn't been below $34.58 for 5 months, but touched $31.00 8 months ago. The way the market is I will keep waiting for around $32ish. Its either BHP or RIO for me, love RIO to go below $55 again.

Commenter

"P" Plater

Location

Gundagai

Date and time

March 20, 2014, 8:01AM

Its time to buy BHP not sell !! $35 is the new $31 if you compare the exch. rate so its got great support at these levels. But 'commodity prices' are not looking healthy atm so not sure if its better to invest in other stocks..

Commenter

clueless

Location

wonderland

Date and time

March 20, 2014, 9:17AM

The gold enthusiasts are very quiet. I've no idea where POG is going. Gold stocks either cheap or will get cheaper.

Commenter

Yin or yang

Location

Date and time

March 20, 2014, 7:41AM

Maybe we should just call it a buying opportunity like share perma bulls do?

Commenter

Gold Enthusiast

Location

Date and time

March 20, 2014, 7:50AM

Should have sold my gold stocks on Monday. Where is my time machine when i need it?

Commenter

Elric

Location

Melbourne

Date and time

March 20, 2014, 8:38AM

Loving GEM .. up 126% in a year and quarterly dividends icing on the cake

@jimmy good stuff indeed@GS i remember trying to convince you that things would be fine when it was seesawing 2.70-2,95 some months back...but you couldnt be swayed.growth stock for a med hold 1-2yrs.

Commenter

BearShapedBull

Location

MugPunters Lounge

Date and time

March 20, 2014, 8:49AM

Re GEM, let's see what happens in the Budget if Joe decides to take the axe to childcare rebates. I think this stock has gone up way too much, way too fast. At its present price it's dividend yield is only 4.37% after taking franking credits and no tax, as in an SMSF in pension mode. I would be selling and using the cash to buy a better yielder.

Commenter

mitch of ACT

Location

Date and time

March 20, 2014, 9:21AM

Yeah :(

After successfully trading it (and Navitas) a few times, I thought the good times would roll and I could get away with it a few more times before an entire market correction.

My top 3 growth stocks were, GEM, NVT, & RMD.... only Resmed has disappointed but I was only trading it and am still out of it.

But the 2 wins with GEM & NVT would by far exceeded a temp loss on paper with RMD.

Once we have an entire market correction, I'll be on the prowl for a new lot of future growth stocks.

Commenter

GS

Location

Date and time

March 20, 2014, 9:21AM

@mitch...so youre mooting a sell signal at current SP level,overbrought?

Commenter

BearShapedBull

Location

MugPunters Lounge

Date and time

March 20, 2014, 9:45AM

@BSB, yes but then I always sell out way too early.

Commenter

mitch of ACT

Location

Date and time

March 20, 2014, 10:27AM

Jed, you must be expecting the aussie economy to boom. I suggest that you recheck the tea leaves.

Commenter

Wally

Location

Flynn

Date and time

March 20, 2014, 7:36AM

If the bubble pops. Remember the Pringles ad "Once you pop you can't stop"

Commenter

Matt

Location

Date and time

March 20, 2014, 7:36AM

My sympathies to the gold nuts on here. Just when you would think the price would spike, non-war breaks out instead. Give it time. Humanity always seems to find something to fight over.

Commenter

mitch of ACT

Location

Date and time

March 20, 2014, 7:34AM

The USD looks a good buy. Very hard to see our dollar go up from here.

Commenter

JohnBB

Location

Date and time

March 20, 2014, 7:33AM

sink China sink, I honestly don't think we need you

companies can make things cheaply in any part of the world now.If we want consumers - both India and the African continent will easily have more consumers than China by mid century

"This indicates that the US Fed believes that the US labour market has less spare capacity than initially thought..."

What is your understanding of "less spare capacity"? GG.

Commenter

Gordon Gekko

Location

Greg Coffey World

Date and time

March 20, 2014, 7:23AM

Maybe they acknowledge that the participation rate is trending down due to demographics.

Commenter

Opinion Only

Location

Melbourne

Date and time

March 20, 2014, 8:35AM

Take an example. Suppose the boss has maximum productive capacity (MPC) to employ me for 10 hours, but in fact employs me for 8 hours. There are 2 spare hours of capacity left.

If the boss changes MPC to 9 hours, and I still only work 8 hours, this means "less spare capacity" of 1 hour due to the boss changing MPC from 10 to 9 hours because of falling demand for the product being produced. Perhaps the boss sells some equipment or downsizes to a smaller factory.

On the other hand (assuming MPC is 10 hours), if the employee is given more work, say 9 hours, this means "less spare capacity" of 1 hour due to increased demand for labour and reflects increasing demand for the product being produced. GG.

Commenter

Gordon Gekko

Location

Greg Coffey World

Date and time

March 20, 2014, 9:43AM

When is WTF takeover offer is being announced ?

Commenter

Ronn

Location

Sydney

Date and time

March 20, 2014, 7:21AM

oh dear is this the beginning of world wide interest rate rises, get ready house owners, not long now...housing boom boom boom

Commenter

Jed

Location

Burwood

Date and time

March 20, 2014, 7:19AM

If the bubble pops. Remember the Pringles ad "Once you pop you can't stop"

Commenter

Matt

Location

Date and time

March 20, 2014, 7:36AM

Jed, you must be expecting the aussie economy to boom. I suggest that you recheck the tea leaves.

Commenter

Wally

Location

Flynn

Date and time

March 20, 2014, 7:36AM

no Wally - aussie market going nowhere, but interest rates worldwide will rise if the US does, so get ready to be stung aussie home owners - I cant wait to witness the pain

The 1% said yippee let's pay ourselves even bigger salaries and bonuses using free money because of the GFC pain we've had to endure.

The littlelandlords said tra la la la la I can put my rents up and pay lower interest.

Janet Yellen said six months, the music stopped and the chairs are all made out cardboard.

Commenter

Allan

Location

Prahran

Date and time

March 20, 2014, 7:08AM

QE is over, that much is clear as financial rates return to normality. Inflation is coming, far better for governments than deflation (e.g. Japan of the last 15 years).

The jukebox hasn't stopped, but it's playing a different tune as the AORDs gyrates up & down, month to month over the last 4 months (Dec up, Jan down, Feb up, Mar down).

Commenter

Goldman

Location

Date and time

March 20, 2014, 10:28AM

Welcome to the 2nd US century which doesn't bode well for Australia's one trick resources economy.

It was never going to be China's century. They are decades away from a social market economy. The crony capitalism economy is a chain around their neck which threatens to drown them.

Commenter

Allan

Location

Prahran

Date and time

March 20, 2014, 7:00AM

"2nd US century"...Yes. They are truly the lucky country...This whole gas thing will make them prosper again DESPITE being the most wasteful people on earth. They've gotten yet, another "get out of jail free" card.

Commenter

JohnBB

Location

Date and time

March 20, 2014, 7:19AM

C'mon KCN, SLR, BDR pls don't drown my Super

Commenter

JimmyM

Location

KCN Ditch

Date and time

March 20, 2014, 6:59AM

Get ready for a bumpy ride with KCN!!!Not looking forward to open :(

Commenter

NSC

Location

Date and time

March 20, 2014, 7:09AM

KCN being investigated by ASIC over Thai "payments" not helping!

Commenter

Bruiser

Location

Date and time

March 20, 2014, 7:30AM

Where abouts can I find those details Bruiser? That's news to me!

Commenter

NSC

Location

Date and time

March 20, 2014, 7:47AM

KCN looks to be settling at $1. I think that would be an okay outcome for today. Wait until the end of the month to find out what they're really worth. Some big trades this morning by bargain hunters (hopefully they make a killing!!). No one said it would definitely be great fun owning gold stocks.

Commenter

NickH

Location

Melbourne

Date and time

March 20, 2014, 7:53AM

Try the capital raising presentation or look left.

Commenter

Bruiser

Location

Date and time

March 20, 2014, 8:07AM

Details to your left or in capital raising presentation.

Commenter

bruiser

Location

Date and time

March 20, 2014, 8:39AM

Gees, skipped straight over that! Cheers for pointing that out. Surely they should have put out an ANN for that? Not slap it in an CR presentation. Starting to lose faith quickly with mgt.

Premarket pricing1135 is up on the major shares this morning??? They could still go down at the open but perhaps the thought of higher interest rates in the US is viewed positively by our market??? I cant imagine why at this stage but it will be interesting to see how the market reacts. One reason could be a higher US dollar making our products effectively cheaper and we sell more materials???

Commenter

It's All About Making Money

Location

Lennox Hd

Date and time

March 20, 2014, 6:59AM

Spi down 25 another ridiculous day for ASX. Up 350 points in four years lost 83 points on Friday which represents 1 years profits over the last four years gone in one day. Goes down every time the Dow goes down and worse. What's going on with the ASX in particular stock code NEN.

Commenter

Norman

Location

Sydney

Date and time

March 20, 2014, 6:58AM

Well you'll love this. The ASX who take longer to open than any other stockmarket couldn't even open on time. Last stocks are supposed to open by 10.10 Nope 10.16.08 Secs

Commenter

Davidson

Location

Sydney

Date and time

March 20, 2014, 7:47AM

With all this talk about the action of the US private bank the Federal Reserve, it's amazing that nobody mentions the obvious. This bank has no legitimacy whatsoever as a agent of the government. The bank should be relieved of all its duties and the authority over money supply should be nationalised and instead fall under Congress.

Commenter

Dr No

Location

Sydney

Date and time

March 20, 2014, 6:56AM

I'm sure that would work very well - NOT!! How effective has Congress been in any areas of government in recent years. US Budget arrangements, Health Care or Debt Ceiling debates anyone?

Commenter

Dan2

Location

Washington - or some other fairyland

Date and time

March 20, 2014, 7:23AM

Yeah, because we can count on Congress to do the right thing!!!

Commenter

Life Is Good

Location

The Real World

Date and time

March 20, 2014, 7:33AM

absolutely, the process of perpetually creating public debt is a crime against everyone - especially the people, bankers rule - for now....

Commenter

toaster

Location

Date and time

March 20, 2014, 8:48AM

Larry (comment from SMH article)..."people whinging about housing affordability yet are too cowardly to not be extremely PC.".........They're not cowardly. It's how they've been conditioned by school, media and their dumb parents. The youth of today have been played so well. I feel for them. When they finally work it out (in their late 30's? Ten years time?). There'll be violence this country's never seen. (Is that what we want in our later years? To have created such drama for the people we love?) We as a country have an obligation to these young people to provide a good life in a healthy good country. We have failed them horribly in every way.

Commenter

JohnBB

Location

Date and time

March 20, 2014, 6:54AM

JohnBB ok I hear you, the population is too high, we'll all be "rooned".. kids can't afford to buy a place within 20kms of the CBD.. boo hoo. I have worked 35 years paid off 2 mortgages and I can't afford to buy a house within 20kms of the Sydney CBD either.. but I do like to travel and having just returned from overseas ( north Africa..) I can assure you there is plenty of room for more here in Aus..even with the draught we can still provide for millions more, but just keep on pretending we're full..it may delay hoards a while longer

Commenter

Lean Too

Location

Date and time

March 20, 2014, 7:27AM

I thought rants weren't allowed on this forum any more!

Eds: Yes, fair point!

Commenter

Life Is Good

Location

The Real World

Date and time

March 20, 2014, 7:47AM

@Life Is Good..."But I am happy to hear arguments to the contrary."....You don't want to hear any contrary arguments....A bit of honesty would be good hey?

Commenter

JohnBB

Location

Date and time

March 20, 2014, 8:17AM

The violence will be misdirected as usual. Immigrants will probably take the hit. Australia can be stupid.

Commenter

Gen Y

Location

Perth

Date and time

March 20, 2014, 12:26PM

It's a stark irony that the person who was on tv just a few days ago telling us how we don't need the financial services reforms that have been years in the making because businesses can be trusted and the consumer is of course fully aware of what commissions they are paying.

Wrong and wrong. The fact is the sticky fingered, secretive and deceptive conduct of the financial services sector caused the GFC and wiped out the life savings of countless innocent victims around the world.

The "I didn't know" defence is laughable especially when framed as the "I couldn't have known" line from Sinodinos, a director of the company no less. How then does the financially illiterate consumer know what deals and pay offs are being made behind the scenes?

Commenter

Allan

Location

Prahran

Date and time

March 20, 2014, 6:53AM

You can take it as a sure guide that the amendments to FOFA are dodgy and drafted to suit the vested interests by the indecent haste the gov't is using to rush the Bills through the House. The less scrutiny a gov't allows the more scrutiny should be given.

Commenter

mitch of ACT

Location

Date and time

March 20, 2014, 7:08AM

great point @allan,agree with you fully.What happened to more transparency and regulation to stop things going backwards.Glass fogged up and the red tape gets fast tracked by policy to "free up" business.

Commenter

BearShapedBull

Location

MugPunters Lounge

Date and time

March 20, 2014, 8:59AM

"A property developer paid 12 million yuan ($A2.09 million) for the one-year-old golden-haired mastiff at a "luxury pet" fair on Tuesday in the eastern province of Zhejiang, the Qianjiang Evening News reported."

This is the sort of news that is fueling the rising anger of the 500M poor Chinese who don't even have access to affordable healthcare.

Property developers have made themselves into billionaires by cosy deals with CCP princelings and local officials, evicting farmers and local residents and appropriate their land.

Commenter

Allan

Location

Prahran

Date and time

March 20, 2014, 6:49AM

Oh No, what's going to happen to the price of our dogs.

Commenter

mitch of ACT

Location

Date and time

March 20, 2014, 7:15AM

Alan.. your BS meter is failing , this is a beat up story if ever there was one, come on.. admit it not even a wealthy oligarch would spend that much on a pup.

Isn't it incredible. Rents rising in this environment. If internet sales don't bang the final nail into the retail corpse, landlord greed will.

Short MYR at $2.63.

Commenter

Allan

Location

Prahran

Date and time

March 20, 2014, 6:44AM

So much for a retail recovery (at least based on purchases from Oz shops) with both DJs and Myer profits falling.

Commenter

Viking

Location

Sydney

Date and time

March 20, 2014, 6:35AM

"Retail recovery" makes as much sense as a fat person gorging themselves on the lounge for 6 months to lose weight. This stuff's so ridiculous. We will be bankrupt just like all the other western countries whose signs are trying so hard to tell us ....."don't do what we did"...What's wrong with a whole country that believes this BS after it's failed EVERYWHERE?

Commenter

JohnBB

Location

Date and time

March 20, 2014, 7:02AM

And...."we were given a get out of jail free" card with the continuing boom. ....but no...We continued spending, borrowing, populating. So mind numbingly stupid we deserve what's coming. Not one politician tried to stop it. Not one.

Commenter

JohnBB

Location

Date and time

March 20, 2014, 7:13AM

Just as I said 2 weeks ago, Myer profits would stink. Net profit down 8%.. no surprise, they will eventually have the shop fronts of a $2 shop :P

When retail royalty like Reject Shop & Supercheap disappoint, you can definitely expect the peasants (Myer/DJS) to do badly as well.

Commenter

GS

Location

Date and time

March 20, 2014, 6:33AM

Just wait till Joe's Budget slashes household disposable income with reductions in benefits and new taxes and increases in existing taxes. Retail is on the nose now and soon you won't want to be in the same room as retail stocks.

Commenter

mitch of ACT

Location

Date and time

March 20, 2014, 6:51AM

And still Bernie Myers contract has been renewed. Myer's board have no imagination or proper concern about the well being of their company. I suppose they are waiting for Aus govt to impose tax on parcels from overseas to counter competition from Macy's, ASOS and so on.Why does it take much more savage drop in profits for the shareholder activism to eventually eject the CEO and the board ?

Commenter

Ronn

Location

Sydney

Date and time

March 20, 2014, 6:52AM

It isn't hard to call Myer/DJs profits to be down when all the brokers are doing the same thing. They beat most estimates on how bad they would be which is a good thing. I think department store retail is just finding the "new normal" with margins which i think is close. It just seems that they have gone through an extensive period of higher capex over the last few years which hopefully pay off for them over the next few years. If they have to reinvent themselves again in 2 years to encourage people through the front doors it will not be pretty.While I don't follow the big retailers that much, what I don't get a good read on is how much more gains DJs/Myer can get out of squeezing the CoDB and renegotiating the supplier contracts?

Commenter

DraftReader

Location

syd

Date and time

March 20, 2014, 7:24AM

Yes It wasn't hard to expect them to disappoint 2 weeks ago, but at the time, I was mainly alluding to the fact that it was getting overvalued around the $2.70 range and that it was a good call for selling out.

Not sure if I'll be looking to buy these stocks again without a significant discount.

Commenter

GS

Location

Date and time

March 20, 2014, 8:10AM

Lets see a blood bath today!

Commenter

Matt

Location

Date and time

March 20, 2014, 6:29AM

Market will go down, but there will be no bloodbath.

Commenter

xyz

Location

Date and time

March 20, 2014, 6:56AM

NO Blood Bath. Low/Zero interest rate is unhealthy in long run. Rate rising is cyclic and an prudent act. .Australian Stock market very high chance to bounce back in the afternoon as AUS market has its own character.